HKMA launches nine measures to support SME financing
The Hong Kong Monetary Authority and the Banking Sector SME Lending Coordination Mechanism on Thursday unveiled nine initiatives aimed at helping small and medium-sized enterprises to access bank financing and enhance their bargaining power.
To provide support for SMEs seeking financing, participating banks in the mechanism will never demand early repayments from mortgage borrowers who repay on schedule.
They will offer clients a transition period of at least six months for credit limit adjustments and expedite the processing of applications for the 80 percent and 90 percent guarantee products under the government-backed SME Financing Guarantee Scheme.
Other measures comprise the establishment of a comprehensive platform that offers information on banking services, as well as organizing regular meetings with business sectors to gain insights into the specific requirements of SMEs.
Participants in the Banking Sector SME Lending Coordination Mechanism — a program established by the HKMA in October 2019 — include 11 lenders.
According to the city’s de facto central bank, the participating banks in the mechanism together approved over 110,000 loans to SMEs last year, involving an aggregate facility limit of over HK$450 billion ($57.5 billion).
“SMEs form the backbone of Hong Kong’s economy,” said Frank Fang, general manager and head of commercial banking, Hong Kong and Macao, HSBC. “Supporting SMEs not only secures their prosperity but also contributes to the broader goal of building a resilient and dynamic economy.”
Recent data from the Census and Statistics Department has shown some improvement in the overall business sentiment among SMEs last month, with the diffusion index on business receipts increasing from January’s 43.3 to 43.9 in February, while SMEs will continue to prioritize liquidity management as they adapt to the changing market dynamics.
In light of the extension of the 80-percent and 90-percent guarantee products, HSBC will offer a two-month interest rebate of up to HK$10,000 and an application fee waiver of up to HK$10,000 from April 1 to Sep 30, in addition to its current guarantee fee rebate of up to HK$50,000.
Bank of China (Hong Kong) said the average number of approved loans for the 80-percent and 90-percent guarantee products in the first two months of this year rose by more than 15 percent yearon-year.
The bank said it will continue to provide suitable repayment plans to alleviate cash flow pressures for enterprises and will leverage merchants’ electronic transaction data to streamline the loan approval process.
The Hong Kong Association of Banks applauded the nine measures aimed at assisting SMEs in obtaining financing and promoting their long-term growth, saying the new initiatives mark a further step in aiding SMEs in navigating challenging market conditions.
Banks in Hong Kong have been unwavering in utilizing their expertise and balance sheets to support customers as the recovery takes hold, the association said, adding that they will maintain close collaboration with the HKMA and the business community to provide comprehensive support to SMEs.